World Trade Organization – WTO Introduction

World Trade Organization – WTO

Introduction

In an ever-changing world trade scenario, there has to be a forum which can set rules and regulations for countries and governments to trade by and also can serve as a platform to settle differences in the trading community. World Trade Organization (WTO) is one such forum which negotiates trade agreements and is also a place for settling trade disputes between member governments. It is a forum where member governments try to sort out trade problems by facing each other and also operates a system of trade rules. WTO is officiated and administered by its member governments and all its major decisions are made by the membership as a whole, who meet each other regularly in Geneva. To be precise, WTO contributes to worldwide economic growth and development by providing a forum for negotiating agreements which are aimed at reducing obstacles to international trade and confirming smooth trade between member nations. It provides legal and institutional framework for the implementation and monitoring of these agreements, as well as work as platform for settling disputes which arises from their application and interpretation.

Currently speaking, WTO comprises of 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties). On January 1 1995, WTO was officially commenced, under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization has 160 members, of which 117 are developing countries or separate customs territories and its activities are supported by a Secretariat of about 700 plus staff, which are commanded by the WTO Director-General. The Secretariat of WTO is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million ($180 million, €130 million). The three official languages which are used in WTO are English, French and Spanish. WTO agreements are presumably lengthy and complex in nature. It is because they are legal texts which cover a wide range of activities. As far as decision making of WTO is concerned, it is generally taken by consensus of the entire membership.

The current Director-General of WTO is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland. The Ministerial Conference is the highest institutional body, which meets approximately every two years. Subsequently, a General Council conducts the organization's business in the intervals between Ministerial Conferences and both of these bodies encompass all members. The specialized subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, controls, manages and monitor the implementation by members of the various WTO agreements. On 7 December 2013, Bali Package, trade facilitation agreement was reached by all members. It was the first comprehensive agreement in WTO history.

The other main activities of WTO comprise building capacity of developing country government officials in international trade matters and also assisting the process of accession of about 30 countries who are still to become member of WTO. The founding and guiding principles of WTO are primarily to open national markets to international trade, with justifiable exceptions or with adequate flexibilities. This will encourage and contribute prosperously to raise people’s welfare, reducing poverty, fostering peace and stability and also to the sustainable development worldwide. This type of market opening should be accompanied by resounding domestic as well as international policies which can contribute to the economic growth and development, as per the needs and aspirations of every member nation.

The organization structure of WTO comprises of Council for Trade in Goods, Council for Trade-Related Aspects of Intellectual Property Rights, Council for Trade in Services and Trade Negotiations Committee. The outcome of WTO functioning comes from the outcome of the negotiations. The most significant part of WTO working comes from the 1986-94 negotiations, which is Uruguay Round while the earlier negotiations were under the General Agreement on Tariffs and Trade (GATT). Currently speaking, WTO is hosting new negotiations, under the ‘Doha Development Agenda’, which was launched in 2001. The core element of WTO is its agreements which are negotiated and signed by the greater part of the world trading nations. These types of specialized documents provide legal ground rules for the international commerce which are mainly contracts that binds governments to keep their trade policies within agreeable contracted limits. The main objective is to help producers of goods and services, exporters, and importers to perform their business efficiently as this allows governments to meet social and environmental objectives in most promising way.

To be precise, WTO agreements covers services, goods and intellectual property and influence out the principles of trade liberalization and also the permitted exceptions. These agreements include commitments of member countries to lower custom tariffs and other trade barriers and also to open and keep open service markets. WTO agreements set procedures for settling disputes which are not fixed or stagnant. The organization arranges hundreds of technical cooperation missions to developing counties like India annually. In Geneva, WTO holds various important courses for government officials to develop the infrastructure and skills that are needed to develop and increase their trade prospects. WTO outreaches to non-governments organizations, media, and public, numerous international organizations on various aspects and also on ongoing Doha negotiations.

Conclusions

As far as India’s perception is concerned, it would be most decisive and significant to protect the interest of farmers, during the Doha negotiations, even at the cost of abovementioned benefits that might have been made in services and Non-Agriculture Market Access (NAMA) negotiations.

In case of agricultural negotiations, the field of interest may be drifting away from India if it is required to carry out deep tariff cuts without any simultaneous elimination of farm subsidies by developed countries. The most determined and motivating proposal would be permitting the US as well as EU together in providing trade-distorting subsidies to the amount of $ 30 billion. In addition to this, the developed countries may possibly be in a position to increase subsidies under this category beyond the present levels of $ 90 billion. These types of high levels of farm subsidies in developed countries, supplemented with deep tariff reductions in India, could relentlessly be threatening the livelihood of India’s farmers as well as the food security of its people.

Therefore, India does not require reducing bound rates to address the existing food shortage. As we know that India’s prevailing regime in some service sectors (like telecom) is more liberal than its existing commitments at the WTO, it could seek to influence and control this by binding its existing regime, provided it obtains proportionate give-and-take concessions.